As Whiplash141 pointed out, the ownership of the merge blocks on both the decoys and railgun projectile sometimes stops them from merging (and therefore reloading). The problem with setting the merge blocks as "owned by nobody" is that the ships turrets will open fire on the decoy/projectile as they exit the ship.

The current solution is keep the ownership and "reload" the projection with a fresh blueprint of the projectile when a malfunction occurs, although this does not stop the malfunction from happening now and then.

Any suggestions on a more elegant solution?